Matthew Sigel, head of digital asset research at VanEck, has explained how just 5% of the G8’s reallocations from gold could impact Bitcoin supply.
The world is slowly warming to Bitcoin and digital assets. Once viewed as highly speculative and lacking in intrinsic value, the pioneering crypto asset has forged a reputation as a store of value and digital gold.
Since Donald Trump proposed a national Bitcoin stockpile, the prospects of holding the asset as a reserve asset have trended among nation-states. While the United States has yet to establish one, other countries are already looking to get ahead of the adoption curve.
Meanwhile, pro-Bitcoin Republican Senator Cynthia Lummis has teased the idea of reallocating some US gold reserves to Bitcoin. With the concept still viewed as a viable option to create the Bitcoin reserve asset, Sigel has assessed the liquidity it would attract to the crypto asset.
G8 Countries’s 5% Reallocation Massive for Bitcoin
The VanEck executive did not just assess the possible impact of the reallocation for the US; he also shared the impact of a similar ploy among the G8. For context, the G8 countries consist of eight of the most technologically advanced countries in the world.
In a Wednesday post, Sigel shared that if these high-caliber countries shift just 5% of their gold reserves to Bitcoin, they will outhold the US spot exchange-traded funds (ETFs). Notably, the Bitcoin products are the largest Bitcoin holders cumulatively.
Sigel highlights that the G8 countries are the United States, Germany, Italy, France, Russia, China, Switzerland, and Japan. Meanwhile, data shows that they hold over 30,000 tons of gold, amounting to roughly $2.9 trillion.
G8 Outcome with Different Gold Reallocation to Bitcoin/VanEck
If they allocated just 5% of their stash to buying Bitcoin, they would inject $145 billion into the market. At the current price, the stash would be worth about 1.48 million BTC, more than 5% of Bitcoin’s total supply.
Is It Feasible?
Notably, America, Russia, Switzerland, and Japan are the only countries among the eight that currently have a friendly stance towards Bitcoin. The prospect of a national Bitcoin reserve is under deliberation in the US, Russia, and Switzerland, while Japan has only just warmed up to the innovation recently.
China has banned crypto in its mainland, and other members of the G8 have been lackluster towards Bitcoin. Nonetheless, with the innovation slowly going mainstream, the possibility of these gold reserve reallocations cannot be entirely ruled out.
